China’s ire deepens over Huawei NBN ban

Diplomatic and business tensions are rising between China and Australia as Prime Minister
Julia Gillard
dismisses them as momentary setbacks.

Ms Gillard said yesterday that her decision to block Huawei from tendering for the $36 billion national broadband network mirrored China’s stance of protecting its infrastructure from foreign influences.

But the first secretary at China’s embassy in Canberra, Miao Miao, said yesterday Huawei had made a positive contribution to economic development in Australia.

“The Chinese embassy pays close attention to the media reports that the Australian side has blocked ­Huawei from tendering for the NBN," she said.

“China hopes Australia will take positive measures and create a fair and non-discriminatory market environment for Chinese enterprises."

Chinese official and Shanghai Financial Services director general Fang Xinghai said the grounds for excluding Huawei from the NBN were unfounded and lacked credibility.

Dr Fang called for greater engagement between China and Australia, so people became less wary of his country’s motivations.“I heard the main concern was the founder of the company was previously a soldier with People’s Liberation Army . . . and his company might be too closely linked with the military," he said.

“Essentially you are saying anyone who has served in the military cannot operate a business. Look at the United States. There are a lot of businessmen who worked in the military before they joined business."

“We hope competent authorities of Australia will provide a level and indiscriminate market environment for Chinese companies instead of wearing coloured glasses and obstructing Chinese companies’ normal operations in Australia in the name of security," Mr Lei said.

But in an essay in the Review liftout today, senior fellow for counter- terrorism and national security studies at the US Council on Foreign Relations Adam Segal writes that China is special because many computer hacking attacks that had originated there in recent times could be classified as government-sponsored or government-tolerated. Beijing sees such hacking as a good way to eke out economic and military advantage.

A professor of strategy at University of Technology Sydney, Timothy Devinney, said Chinese businesses such as Huawei that were looking to expand globally faced a significant challenge in establishing independent governance structures that comforted Western sensibilities.

“Whereas liberal democracies tend to believe in the separation of the economic realm from the political and social, we have to recognise that for the Chinese government the economic system is not independent of the political system," Mr Devinney said.

“Historically, political power has always been linked very tightly with economic power in China. Going back before communism that was also the case." However, Mr Devinney added that Huawei was a well-respected company, and could feel harshly treated given that computer hacking was not a uniquely Chinese pursuit, with Israel, Russia, Germany and many other countries also taking part.

Speaking at an NBN event in Sydney, Ms Gillard said she had “stood up for the national interest on a piece of critical infrastructure".

“I note that Coalition spokespeople are out criticising the government for that decision and effectively advocating on behalf of a Chinese company," she said.

On Chinese relations, she said there would always be moments when nations saw things differently.

“It would be a great error indeed to move from a moment where we are seeing one thing differently and then extrapolating that to the full dimension of the relationship," she said.